Pullis v. Pullis Bros. Iron Co.

GOODE, J. I. As to the receiver’s own compensation, that was undoubtedly properly taxed against the plaintiffs. The point has been already adjudicated, both by this and by the Supreme Court: it is no longer open. City of St. Louis v. St. Louis Gas Light Co., 11 Mo. App. 237; Id., 87 Mo. 223. We do not understand the plaintiffs to challenge this item. H. It was decided, in the case just cited, that counsel fees for services rendered to a receiver in the performance of his duties, by attorneys, are not costs, within the nieaning of section 1547, Revised Statutes 1899, which provides that the prevailing party, in civil actions or proceedings, shall recover his costs against the other party; or of section 755, which directs the court to allow a receiver such compensation for his [250] services and expenses as may be reasonable and just, the same to be taxed as costs and paid as other costs in the case. City of St. Louis v. St. Louis Gas Light Co., 11 Mo. App. 243; Id., 87 Mo. 224. A distinction is drawn between costs of administration and of litigation, by which the latter must be taxed against the losing party, but the former need not in all circumstances. Counsel fees are classed as costs of administration. We have then a precedent directly in point. But it was not decided therein, that such expenses must necessarily be paid out of funds in the hands of the receiver. As we understand the opinion of this court in that case, which was adopted and approved by the Supreme Court, the circuit court, where the receivership proceedings are had, should order counsel fees paid out of the trust fund in the hands of the receiver, if the services of the attorneys were rendered in the interest of the receivership or trust; but might, in its discretion, tax such fees as costs against the losing party, if the necessity or utility of the legal services was not shown. This will appear, if we attend to the opinion of the circuit court in that case, which was quoted in Judge Thompson’s opinion. It is therein said: “Defendant’s counsel contend, as I understand them,, that, as he (namely; the attorney whose fee was questioned) was employed to 'do, and did, much of the distinctive work of the receiver, the allowance of compensation to him was in substance a further allowance of salary to the receiver, who virtually paid his own counsel, and that the amount so paid is taxable as costs, as additional receiver’s salary. There is no proof before the court as to the character of services rendered by the attorney, and in its absence I can not presume the facts to be as claimed. The record only shows the payment from time to time during the receivership, of the aggregate amount of eleven thousand dollars for professional services, and that the amounts so paid were included in the final amicable ac [251] counting between the receiver and the defendant. Erom these facts I must presume that the payments so made were for services in the interest of the trust, like those of any other employee of the receiver, and were properly paid out of the trust-fund, and can not now be taxed as costs against the plaintiff.” Judge Thompson, after quoting the above excerpt, said: “We agree with this view.” We think the effect of the decision is, to leave the matter of allowing counsel fees, for services rendered by an attorney to a receiver and the determination of whether such fees shall be paid out of the receivership property or taxed against the losing party, to the discretion of the chancellor, subject to revision if the discretion is abused. This has always been the rule in equity in regard to that and any other expense incurred by a receiver. Robinson v. Land Co., 80 Mo. App. 621; Howes v. Davis, 4 Abb. Pr. 71; How v. Jones, 60 Iowa 10; Hoyt on Receivers (8 Ed.), sec. 805. The foregoing decision is that our statutes have not changed the rule as to counsel fees. Nor does the opinion in St. Louis K. & S. R. Co. v. Wear, 135 Mo. 230, alter the rule. That decision disallowed compensation and expenses to one as a receiver, who was, in fact, no receiver at all, because the court appointing him acted in excess of its jurisdiction. But the opinion expressly states that a receiver’s allowance for such expense"' does not depend on the correctness of his appointment, if the court had power to make it; thus deciding the precise point here mooted, namely: whether the expenses may be allowed if the court thinks they were meritorious although the receiver’s appointment was ill-advised. There is nothing in the present record to show what services the attorneys rendered, or whether they were at all necessary and subserved the interest of the estate. The-chancellor below taxed the sum allowed them against the plaintiffs, and we would not be justified in reversing his ruling [252] without evidence before us to prove he abused his discretion. Greely v. Provident Sav. Bank, 103 Mo. 212. This exception is, therefore, ruled against the plaintiffs. III. Protecting property from loss by fire by insuring it, repairing damage done by a storm, and the other items of expense stated in the receiver’s account, except the expenses for a watchman, were obviously properly incurred in preserving the estate for the benefit of everyone interested in it. They were such expenses as the owners would likely have incurred themselves in the exercise of sound business management. We think no one has a right to complain of the payment of those items out of the income of the property, and that the rents were justly devoted to that purpose. A receiver must take care of the property intrusted to him and is reimbursed for a reasonable outlay in doing so. Brown v. Hofenhurst, 54 Md. 26; Thompson v. Phoenix Ins. Co., 136 U. S. 287. What is said in the paragraph above concerning the distinction between costs of administration and of litigation, is also pertinent here. We overrule the exception of Harriet and Clara O. Pullis to the court’s action in appropriating the rent money collected by the receiver to pay these items as far as it was needed. The amount of said items is three hundred and eleven dollars and ninety cents, leaving a balance from rents of thirty-eight dollars and ten cents in the receiver’s- hands. Whether the expense of hiring a watchman and providing coal for his use should be paid out of the property or charged against plaintiffs, as costs, depends somewhat on-circumstances. If a watchman was insisted on by the insurance companies as a condition of accepting risks on the buildings, because the property was in litigation and in the hands of a receiver, the plaintiffs, who groundlessly began the action, ought to bear the expense; but perhaps not, if a watchman would have been required anyhow. No proof is before us, and we must presume in favor of the circuit court’s [253] action. Stern v. Foltz, 152 Mo. 552; Woodsworth v. Tanner, 94 Mo. 124. It is very doubtful, at best, whether an owner should be forced to bear such charges nolens volens, because some claimant has had his property impounded by a court. We will let that item stand where the court below put it. IV. The three hundred dollars contributed to the receiver by Cora B. Pullis simply reduced the amount of costs which she would have to pay, or for which she is liable. The decree is modified by ordering that the receiver pay to Harriet Pullis and Clara C. Pullis said balance of thirty-eight dollars and ten cents accruing from rents, and with that modification is affirmed, the plaintiffs to pay the costs of this appeal. All concur.